The Financial Services Commission (FSC) has opened consultations on proposed fitness and proper (‘fit and proper’) corporate governance standards for the four industries it regulates.

The non-banking regulator is moving to revise its framework to assess the fit and proper guidelines for individuals operating across the securities, pension, insurance and trust and corporate service providers industries. The move is meant to harmonise the approach used by the regulator which must apply four different legislations for these industries. The consultation period ends on August 5.

“The primary objective of these standards is to safeguard investors, policyholders, pension beneficiaries, clients of trust and corporate service providers, and the wider public by ensuring that persons in positions of control or influence are fit and proper, thereby reducing the risk of harmful conduct and strengthening confidence in Jamaica’s financial system,” stated the proposed fit and proper standards.

Fit and proper refers to a set of guidelines used to determine the applicability of an individual to be legally employed or perform services in the financial sector. These guidelines are usually reserved for beneficial owners, directors, officers, senior managers and other responsible officers with controlled functions in a regulated entity.

If a person is not defined as fit and proper, the regulator can move to have them disqualified from their substantive role with a regulated entity. The Bank of Jamaica (BOJ) has its own framework for the assessment of fit and proper for individuals involved in sectors under their remit.

“The standards seek to ensure that persons entrusted with positions of control or influence consistently meet high standards of integrity, competence, and financial responsibility,” the proposed standards added.

The harmonisation of fit and proper standards is also being done in tandem with new corporate governance guidelines aimed at closing gaps in corporate governance requirements across the four regulated industries.

According to the FSC’s public consultation paper, the existing corporate governance requirements are dispersed between several primary and secondary legislations, with there being no single consistent statement of expectations.

The public document even noted, “Recent events in Jamaica’s financial sector have underscored the risks that can arise where governance obligations are not centralised, clearly articulated, and consistently applied.”

These new standards will align Jamaica’s regulatory framework with international standards, strengthen oversight and market discipline across the financial sector. A review of the proposed standards sets out minimum requirements for board of directors, the allocation of oversight and management responsibilities, duties of directors, independence standards and the enforcement ability for the regulator for not complying with these standards.

“The Commission is proposing Standards of Sound Practice on Corporate Governance for Regulated Entities as a direct response to these identified gaps,” the public consultation paper stated.

The FSC’s proposed standards come at least four months before the BOJ’s standards on corporate governance for deposit taking institutions (DTIs) and financial holding companies (FHCs) takes effect. Those standards were announced last year and resulted in several listed companies announcing the addition and removal of directors to the boards of their financial subsidiaries to become compliant with the BOJ’s new standards. The move was meant to increase board independence and tension between regulated entities and their FHC parent companies to maintain best practice amongst those firms.

The FSC’s public consultation for corporate governance ends on August 6.

The FSC just closed its consultation phase on the proposed regulations for the virtual asset service providers (VASPs) space. VASPs are businesses that provide services such as exchanging, transferring, safeguarding or administering virtual assets, including cryptocurrencies such as bitcoin, Ethereum and stablecoins.

Jamaica has no domestic VASP sector, but the FSC is moving to create a legal framework for future providers to maintain compliance with the Financial Action Task Force’s (FATF) recommendations. The FSC expects the regulatory regime to be completed in the fiscal year ending March 2027 and has budgeted to collect $21.25 million from VASPs.

According to Government of Jamaica’s (GOJ’s) 2026 Annual Report (Form 18-K) submission to the United States Securities and Exchange Commission (SEC), the FSC is moving to improve regulation in the securities space. The FSC previously submitted a proposal to the Ministry of Finance & Public Service (MOFPS) in 2020 to create regulations surrounding Exempt Distribution (XD) and Issuers Guidelines. These regulations would carry the weight of law and have legislative sanctions for any breaches.

The FSC executed consultations with stakeholders on proposed amendments to the definition of an accredited investor such as increasing the net worth and salary requirements while introducing a knowledge-based criterion. The FSC currently defines an accredited investor as someone who earns more than $10 million in each of the two most recent calendar years or having a net worth greater than $50 million.

The FSC is also moving to propose and implement new changes for capital markets regulations such as new rules for public offerings and disclosures for management discussion and analysis done by companies.

“The FSC has also issued an updated advisory amending the retail repossession framework to expand the pool of allowable assets, including the introduction of cash as eligible collateral, with the goal to enhance market flexibility and strengthen liquidity management practices across the securities dealer sector,” the GOJ annual report noted on the updates to the securities space.

The FSC is also seeking to reform the capital and liquidity framework of the securities industry to align with the Basel III framework being developed by the BOJ while addressing the idiosyncrasies of the industry. These new requirements were delayed due to the COVID-19 pandemic and geopolitical issues.

The BOJ is currently adjusting its standards of sound practice on liquidity risk management and internal liquidity assessments for DTIs. The central bank’s 2025 financial stability report revealed that the BOJ is working on implementing phase II of the Basel III framework this year through Basel III compliant standards. The BOJ is aiming to execute three major regulatory reforms under the Basel III framework by the end of 2027.

The move to introduce new capital and liquidity guidelines for the securities industry comes after the FSC’s board of commissioners was largely controlled by the BOJ up to December 2025. Senior Deputy Governor Dr Wayne Robinson remains the sole BOJ representative on the FSC’s board.

“In 2025, the FSC is seeking to resume its reform of the liquidity framework by introducing a Liquid Asset Coverage ratio and a Minimum Liquid Funds ratio beginning with additional readiness assessments. The consultation paper is expected to be released to the industry during the second half of 2026,” the GOJ annual report noted.

The FSC’s ongoing regulatory reforms is being done ahead of the twin peaks regulatory reform which will see its mandate shift to market conduct and consumer protection. Although the timeline for the implementation has not been defined, it has been practising market conduct with the BOJ under the pilot segment of the four-phase process. It will execute a market conduct risk-based supervision of Sagicor Bank Jamaica Limited and the Bank of Nova Scotia Jamaica Limited (Scotiabank) in 2026.

The FSC lost its substantive appeal in the Court of Appeal on Friday against Stocks & Securities Limited (SSL) and Caydion Campbell. It only won one of the 12 grounds it appealed covering costs. This is the second consecutive defeat at the courts for the FSC which once had temporary management of SSL between January 2023 to May 2024.